Allied GOLD Announces the Closing of Its Acquisition of the Diba Project, Aimed at Improving Near-Term Cash Flow BY Providing Higher-Grade and Lower-Cost Oxide ORE Feed to the Sadiola GOLD MINE
NEWS RELEASE
ALLIED GOLD ANNOUNCES THE CLOSING OF ITS ACQUISITION OF THE DIBA PROJECT,
AIMED AT IMPROVING NEAR-TERM CASH FLOW BY PROVIDING HIGHER-GRADE AND
LOWER-COST OXIDE ORE FEED TO THE SADIOLA GOLD MINE
TORONTO, ON – November 9, 2023 ─ Allied Gold Corporation (TSX: AAUC) (“Allied” or the “Company”)
is pleased to announce that the Company has completed its previously announced acquisition of the
permitted Korali-Sud Small Scale Mining License as well as beneficial interest of the highly prospective
Lakanfla Exploration License (together, the "Project" or "Diba") by acquiring all of the shares of Legend Mali
(BVI) III Inc. from LGN Holdings (BVI) Inc., a wholly owned subsidiary of Elemental Altus Royalties Corp
(TSXV: ELE) (OTCQX: ELEMF) ("Elemental Altus") for consideration comprised of a modest upfront cash
payment, deferred payments based on the achievement of performance, production and operational
milestones, and a Net Smelter Returns ("NSR") royalty.
Strategic Rationale
• The Company is actively implementing its strategic plan to maximize oxide ore content at its
flagship Sadiola Gold Mine ("Sadiola") as it pursues a two -phased expansion plan. In the initial
Phase 1 expansion, modifications to the existing plant are underwa y to accommodate a growing
percentage of fresh rock. Subsequently, in Phase 2, a new processing plant exclusively dedicated
to fresh rock will be constructed.
• Allied's strategic approach revolves around maximizing oxide ore content to enhance production
during the Phase 1 expansion. This effort aims to reduce costs, thereby maximizing margin s,
EBITDA, and cash flows, starting as early as 2024.
• In tandem with ongoing exploration targets aimed at increasing oxide ore inventory across Allied's
portfolio, the Diba Project plays a crucial role in bolstering the Company's cash flows and liquidity
in the near term. This is particularly significant as the Company pursues its growth initiatives.
• Situated 15 kilometers south of Sadiola's processing plant and adjacent to the Sadiola Large Scale
Mining License, the Diba Project presents a unique opportunity. Its geological characteristics
indicate the feasibility of Open Pit mining, utilizing the sam e equipment profile as Sadiola.
Moreover, the ore can be processed at the existing CIP plant, offering the potential to capture
significant synergies and create substantial value.
• The operating plan consists of mining and trucking the high-grade oxides up to a throughput of 1.8
million tonnes per year. These high-grade oxides are expected to increase the average throughput
at Sadiola given their soft ore characteristics and have meaningful positive impact on Sadiola's
production and cash flows.
• The acquisition provides Allied with a high -quality, bolt -on, permitted project with a significant
Mineral Resource and excellent potential for further expansion. As previously noted, the Board has
approved US$12 million in total development costs for the advan cement of the Diba Project,
including expenses for an access road to transport ore to the Sadiola plant, which is expected to
be spent in 2023 and 2024.
• The result of these strategic actions is to increase the Company's production profile moving into
2024 and 2025 before a step change in 2026 with the construction of Kurmuk. The additions of
these ounces, at lower costs, are expected to maximize margin, EB ITDA, and cash flows in 2024,
2025, and 2026. These improvements lay the foundation for enhanced financial performance,
setting the stage for Kurmuk's added contributions. More detailed information on near -term
production guidance will be provided in due course but the Company presently expects production
from Sadiola to be in the range of 17 5-180,000 ounces of gold in 2023, and with Diba, increasing
to an average exceeding 230,000 ounces over 2024 and 2025.
Highlights of the Acquisition
Addition of the Diba Project significantly enhances Sadiola's footprint, value and growth strategy :
• The Project covers a surface area of approximately 107 square kilometers in the same geological
district as Sadiola, providing meaningful near and long-term opportunities for production and
financial growth.
• The Diba orebody shows extensive oxidation at depths of up to 70 m and it presents continuous,
higher grade, mineralization near surface, making it amenable to simple, productive, and cost-
efficient open pit mining methods and agitated leaching at the Sadiola plant.
• Elemental Altus' Mineral Resource Estimate (the "Resource Estimate") issued in August 2022
confirmed Total Indicated Mineral Resources of 312,000 ounces of gold with a grade of 1.24 g/t,
including 199,000 ounces of gold in Oxides with an average grade of 1 .52 g/t, as well as Inferred
Mineral Resources of 362,000 ounces at 0.88 g/t of gold.
• In its due diligence process and subsequent engineering work , Allied has validated the Resource
Estimate and identified a potential of approximately 200,000 ounces of gold readily available in the
oxide and transitional categories at the shovel -ready Korali-Sud project, which are targeted to be
added to the near-term Sadiola mine plan.
• Allied’s board approved the deployment of capital to advance delineation drilling, engineering and
early works for Diba and it expects to define Mineral Reserves and a detailed production plan by
early 2024. The Company expects that a significant tonnage, on a selective targeted basis, will be
processed from this higher grade, oxidized inventory in 2024 and 2025 result ing in increased
production above the base plan, reducing costs and improving margins and EBITDA during the
construction of Kurmuk, thereby ensuring more secure cash flows and liquidity.
Purchase Price
The agreed purchase price consists of cash payments and an NSR royalty.
• Upfront cash payment of US$1 million on closing, followed by deferred amounts payable upon the
attainment of defined production milestones of up to 200,000 ounces produced from Korali -Sud of
up to US$5 million.
• NSR Royalty: The remainder of the purchase price consists of an NSR royalty at a rate of 3% for
the first 226,000 ounces of gold produced from Korali -Sud, and at a rate of 2% for ounces from
Korali-Sud and Lakanfla thereafter.
Qualified Persons
Scientific and technical information contained in this news release has been reviewed and approved by
Matthew McInnes, Senior Vice President, Studies of the Company. Mr. McInnes is an employee of the
Company and a "qualified person" as defined by Canadian Securities Administrators' National Instrument
43 101 - Standards of Disclosure for Mineral Projects.
About Allied Gold Corporation
Allied Gold is a Canadian -based gold producer with a significant growth profile and mineral endowment
which operates a portfolio of three producing assets and development projects located in Côte d'Ivoire, Mali
and Ethiopia. Led by a team of mining executives with operational and development experience and proven
success in creating value, Allied Gold aspires to become a mid-tier next generation gold producer in Africa
and ultimately a leading senior global gold producer.
For further information, please contact:
Allied Gold Corporation
Royal Bank Plaza, North Tower
200 Bay Street, Suite 2200
Toronto, Ontario M5J 2J3 Canada
Email: [email protected]
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain “forward-looking information” within the meaning of applicable Canadian
securities legislation. Such forward-looking information is not representative of historical facts or information
or current condition, but instead r epresents only Allied Gold’s beliefs regarding future events, plans or
objectives, many of which, by their nature, are inherently uncertain and outside of Allied Gold’s control.
Generally, such forward -looking information can be identified by the use of fo rward-looking terminology
such as “plans”, “expects”, “is expected”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”,
“believes”, or the negative or variations of such words and phrases or may contain statements that certain
actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or
“will be achieved”. The forward -looking information contained herein includes, but is not limited to,
information concerning expectations with regards to the Diba Project, and the resulting beneficial ownership
and the key catalysts expected to be achieved by the Company on the Diba Project its impact on the
business of Allied Gold.
By identifying such information and statements in this manner, Allied Gold is alerting the reader that such
information and statements are subject to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or achievements of Allied Gold to be materially
different from those expressed or implied by such information and statements. In addition, in connection
with the forward -looking information contained in this news release, Allied Gold has made certain
assumptions. Among the key factors that could cause actual results to differ materially from those projected
in the forward-looking information are the following: the inability of Allied Gold to achieve any one or more
of its key catalysts on the timeline expected, or at all and any changes in the development of the business
of Allied Gold, as well as those risk factors more generally set out in Allied Gold’s annual inf ormation form
available under Allied Gold’s profile on SEDAR+ at www.sedarplus.ca. Should one or more of these risks,
uncertainties or other factors materialize, or should assumptions underlying the forward-looking information
prove incorrect, actual results may vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected.
Although Allied Gold believes that the assumptions and factors used in preparing, and the expectations
contained in, the forward-looking information are reasonable, undue reliance should not be placed on such
information, and no assurance or guarantee can be given that such forward -looking information will prove
to be accurate. The forward -looking information contained in this news release is provided as of the date
of this news release, and Allied Gold does not undertake to update any forward-looking information that is
contained or referenced herein, except in accordance with applicable Canadian securities laws.